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Baker Hughes: Monthly U.S. rig count drops 20 percent

U.S. rig count falling amid high inventories, low price environment. Photo by David Gaylor/Shutterstock Sign up for our daily Energy Newsletter WASHINGTON, March 6 (UPI) — The number of U.S. rigs actively exploring for or producing oil or gas was down 20 percent from January. Oil services company Baker Hughes published its monthly rig count report for February, and the average U.S. rig count for February was 1,348, down 335 from January and down 421 year-on-year. The average Canadian rig count was 363, down 5 from January and down 263 year-on-year. Oil prices are off about half their June value, as U.S. inventories accumulate, which has led to planned spending cuts in exploration and production. The U.S. Energy Information Administration in its petroleum status report for the week ending Feb. 20, the most recent data available, said U.S. crude oil inventories increased by 8.4 million barrels from the previous […]

Posted On : Published By : Tom Whipple
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Bakken Rigs Decrease to 106

Whiting Petroleum to Cut Rigs in 2015 Whiting Bakken Acreage Map | Click to Enlarge The Bakken-Three Forks rig count decreased by three t0 106 rigs running across our coverage area by the end of last week. In recent Bakken news, Whiting Petroleum announced a record 2014 and revealed a 2015 spending plan that includes reducing Bakken rig count. Read more: Whiting to Reduce Bakken Rig Count The U.S. rig count fell another 72 to 1192 rigs running as of today. A total of 268 rigs were targeting natural gas (down 12 from the previous week) and 922 were targeting oil in the U.S. (64 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 108 rigs are running in the Williston Basin across MT, ND, and SD. 105 are in ND alone. Bakken Oil & Gas Rigs The number of oil […]

Posted On : Published By : Tom Whipple
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US Rig Count by Location

Baker Hughes publishes a weekly oil and gas rig count by producing basin. I have created charts of all the most productive basins in order that we can see where oil and gas rigs are increasing or decreasing. Their historic rig count, by basin, goes back 4 years. It needs to be noted that Baker Hugs does not count rigs that are not actively drilling. Rigs that are “Moving In, Rigging Up” are not counted in the Baker Hughes count though they are counted by some others including the North Dakota Industrial Commission. All rig counts are of Friday, February 27, 2015. Rig Count Total US But first, total US weekly rig count. The oil rig count stands at 986, down 623 from a high of 1,609 in October. The gas rig count stands at 280, down 656 rigs from the high of 935 in October of 2011. However […]

Posted On : Published By : Tom Whipple
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U.S. shale producers get no relief from rising Brent: Kemp

LONDON (Reuters) – More than ever before, U.S. shale producers are becoming the victims of outdated restrictions on the export of crude oil from the United States. Export controls have ensured the most oversupplied part of the global oil market is at home in the United States. The main beneficiaries are rival producers in the Middle East and elsewhere able to obtain higher international prices thanks to the export ban. U.S. shale producers have received almost no benefit from the improvement in international oil prices since the middle of January. Benchmark Brent prices have risen around $16 per barrel since hitting their recent low on Jan 13. But prices for shale producers are tied to the domestic marker WTI which has risen by only $4 per barrel over the same period ( link.reuters.com/buv24w ). In the middle of January, posted prices for shale producers in Texas and North Dakota […]

Posted On : Published By : Tom Whipple
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Clock ticks toward North Dakota producers reaping up to $5.3 billion oil tax break

WILLISTON, N.D. (Reuters) – The clock is still ticking on a potential $5.3 billion, two-year tax break for North Dakota’s oil industry after a state-calculated average of February’s crude price fell below $52.59 per barrel last month. The state waives its 6.5 percent oil extraction tax if the monthly price of benchmark West Texas Intermediate (WTI) crude at the Cushing, Oklahoma, transport hub falls below an inflation-adjusted limit, set at $52.59 per barrel for 2015, for five consecutive months. For February, the average calculated price was $50.86 per barrel, according to North Dakota Tax Commissioner Ryan Rauschenberger. The average was an increase from the January average of $47.98 per barrel. The tax break kicks in if the average monthly price is below that $52.59 level for each of the next three months. If it is off even one month, the clock resets. The tax returns if the average price […]

Posted On : Published By : Tom Whipple
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Whiting to Reduce Bakken Rig Count

Whiting Bakken Acreage Map | Click to Enlarge In its fourth quarter earning report, Whiting Petroleum announced a record 2014 and revealed a 2015 spending plan that includes reducing Bakken rig count. In spite of low crude prices, Whiting ended the year with a Q4 profit of $58 million with cash flows totalling $419 million. Oil production was at record numbers for both the quarter (up 13%) and the entire year, which averaged 41.8 MMBOE and was up 22% over 2013. Related: Whiting Bakken Production Hits Record Levels in Second Quarter In July of 2014, Whiting Petroleum announced plans to acquire Kodiak Oil & Gas for $3.8 billion. The deal made the combined company the largest Bakken/Three Forks producer, unseating Harold Hamm’s Continental Resources from the top spot. Read more: Whiting Petroleum Acquires Kodiak Oil & Gas – $3.8 Billion James J. Volker, Whiting’s Chairman, President and CEO, commented, […]

Posted On : Published By : Tom Whipple
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Bakken Rigs Count Down to 109

Bakken Oil Well | Click to Enlarge The Bakken-Three Forks rig count decreased by 12 t0 109 rigs running across our coverage area by the end of last week. In recent Bakken news, Governor Dalrymple of North Dakota signed legislation that grants massive emergency funding to counties and cities statewide in order to bolster the lagging infrastructure. The bulk of the money is targeted to fix roadways and bridges that have not been able to keep up with the increased traffic of heavy oil field equipment that the shale boom has brought to the Bakken area. Read more: Governor Dalrymple Commits to Infrastructure The U.S. rig count fell another 43 to 1267 rigs running by the end of last week. A total of 280 rigs were targeting natural gas (down nine from the previous week) and 986 were targeting oil in the U.S. (33 less than the previous week). […]

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Reality hits North Dakota’s pricey apartment market; rents drop

WILLISTON, N.D. (Reuters) – It is getting cheaper to rent an apartment in North Dakota’s oil patch. Prices, which only last year rivaled levels in New York City and Geneva, have slipped about 15 to 20 percent in the past two months as dozens of new apartment buildings opened in Williston, Watford City and other oil hub cities. Growth in demand has slipped because the plunge in crude oil prices has led to cuts in capital spending by energy producers.     There are still about 1,800 energy-related jobs unfilled in the No. 2 U.S. oil-producing state, and there is still demand for apartments. But the accommodation shortage is nothing like it was when the state’s oil boom began six years ago. As new developments start leasing, tenants are able to negotiate lower rents. "You’re starting to see prices fall this year as more units come online," said Terry Metzler […]

Posted On : Published By : Tom Whipple
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U.S. shale producers get no relief from rising Brent: Kemp

LONDON (Reuters) – More than ever before, U.S. shale producers are becoming the victims of outdated restrictions on the export of crude oil from the United States. Export controls have ensured the most oversupplied part of the global oil market is at home in the United States. The main beneficiaries are rival producers in the Middle East and elsewhere able to obtain higher international prices thanks to the export ban. U.S. shale producers have received almost no benefit from the improvement in international oil prices since the middle of January. Benchmark Brent prices have risen around $16 per barrel since hitting their recent low on Jan 13. But prices for shale producers are tied to the domestic marker WTI which has risen by only $4 per barrel over the same period ( link.reuters.com/buv24w ). In the middle of January, posted prices for shale producers in Texas and North Dakota […]

Posted On : Published By : Tom Whipple
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Oil Prices Don’t Change Because of Rig Count

Oil prices don’t change based on weekly rig count reports.   Yet every week, there are proclamations by analysts that oil prices are poised to recover because of some change in the  Baker Hughes North American rig count . Others state that U.S. tight oil production will continue to rise despite falling rig counts because of the miracle of shale rig efficiency. What this really means is that nobody has any idea about when oil prices will rebound. As I have previously  written , that is because nothing has happened so far to cause a change in oil prices.   What can we learn from rig counts?  The weekly U.S. rig count is another data point that, along with other data points, can help us to see potential trends while we wait for something meaningful to happen that causes oil prices to rise…or to fall farther. But we have to do some work with the data before […]

Posted On : Published By : Tom Whipple